• FxWirePro: EUR/AUD bulls shrug-off shooting star, but hanging man pattern ensures range-bounded trend - trade debit call spread

    Source: FxWire Pro - Technicals / 14 Aug 2018 08:19:24   America/New_York

    Yesterday, EURAUD forms shooting star at 1.5693 levels, but bulls seem to be shrugging-off this bearish pattern. 

    The stiff resistance is observed at 1.5701 levels. Failure swings were observed in the recent past at this juncture (refer daily charts).

    For now, more rallies seem to be on the cards upon the break-out and sustenance above stiff resistance and bullish SMA & MACD crossovers.

    While on a broader perspective, hanging man pops up at peaks of rallies (at 1.6036 levels) coupled with overbought signal by leading oscillators, while long lasting range-bounded major trend persists (refer monthly plotting).

    Bears likely to drag slumps on these bearish formations, while both leading indicators (RSI & stochastic curves) on this timeframe signal further weakness.

    Although there is some minor bullish sentiments are observed in the recent past, overbought pressures are seen from last two months, it alarms bears trying to take over the rallies as the slow stochastic noises with %D line cross over.

    Hence, on trading perspective, debit call spreads are advocated as the buying indications are piling up on daily graph. So selling an Out-Of-The-Money call option is recommended to reduce the cost of hedging by financing long position in In-The-Money call option.

    Execute strategy by, buying 2w (1%) In-The-Money 0.69 delta call option and short 2w (1%) Out-Of-The-Money call option for net debit. The strategy can be executed at net debit.

    Currency Strength Index: FxWirePro's hourly EUR spot index has shown -80 (which is bearish), while AUD is flashing at -67 (bearish), while articulating at 12:01 GMT. 

    For more details on the index, please refer below weblink: 

    http://www.fxwirepro.com/currencyindex

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